Noncompete Clauses and Privacy

This could make a great case in the nonexistent casebook that Solove, I, and Larry should write together: Privacy, Agency & Contract. An employee signs a noncompete. He goes to a job site for his employer and discovers an opportunity to work on the side for a company he is trying to build – a corporate opportunity if there ever was one. Rather than disclose the opportunity, he calls in sick the next few days and works at the job site on his own behalf. The employer, smelling a rat, hacks the employee’s cellphone GPS to track him, and then shows up at the job site and fires him. The employer has now sued, “seeking damages including actual damages, all property and confidential information be returned, and they want [the employee] prohibited from doing any business with current clients.” No word on whether the employee has asserted any privacy-related counterclaims, but I imagine that Solove will think of a few.

(H/T: Blumberg)

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Dave Hoffman

Dave Hoffman is the Murray Shusterman Professor of Transactional and Business Law at Temple Law School. He specializes in law and psychology, contracts, and quantitative analysis of civil procedure. He currently teaches contracts, civil procedure, corporations, and law and economics.

11 Responses

I don’t have access to the complaint, but I don’t see where it says the employer hacked anything — just that they tracked using the GPS on a corporate cell. If the corp policy informed employees that their use of corp devices would be/could be monitored, I don’t see where the employee would have any real counter-complaint from a privacy perspective. What am I missing?

Even if there were a problem with his assent to the written contract, what about his behavior: wouldn’t there be a question of whether his expectation of privacy was reasonable, given that he accepted a cell phone that came from the company, and indeed was carrying it around with him?

This is very strange. If the employer tracked the employee to some otherwise secret site, there might be a dispute over whether the tracking was allowed.

But what the heck is this about? The employer had a contract with the client company to do work *at the job site.* The employer visited *the job site* and found the employee doing work there for his own account. What’s the employee’s expectation of privacy *at the job site*?

Now, if you want a better case, suppose the employee was doing work for the client company at some other site, not part of the contract of his employer. Suppose the only way the employer had for finding that site was via the GPS tracking. THEN you’ve got an expectation of privacy issue.

After I submitted my comment (above) I red the linked article and discovered that an important detail in the summary above is different from the report.

The employer did not “hack” the cellphone. It was the employer’s cellphone, and they had access through standard procedures to the GPS data, without even needing physical access to the phone.

A standard feature of GPS phones is a location feature available on the website of the cellphone company. The owner of the phone can log into the website and read the GPS location. That’s not hacking, it’s not a secret, and it’s not unusual. Employers typically do it to verify mileage claims and timesheets. There is ZERO expectation of privacy regarding those GPS locations. Any employee who takes an employer cellphone and thinks his location is a secret *while the cellphone is turned on* is a doofus.